Health insurance: Does ‘narrow’ mean bad?

BlueCross BlueShield Tennessee can offer Network E for a low price because the plan funnels people to one large provider. In Nashville, people who sign up for Network E can get care at facilities owned by Saint Thomas.
(Photo:
File / Gannett Tennessee
)

We are becoming bigger stakeholders in our own health care — many of us with employer-sponsored plans are paying a greater percentage of the cost of care. Those of us shopping on the federal health exchange are buying for ourselves, often for the first time.

“The underlying theme in all of this is: If you’re going to provide coverage to everybody and you’re going to do that in a way that’s cost-effective, something’s got to give,” said Austin Madison, vice president with The Crichton Group, a Nashville insurance company.

Now, insurers have come up with a way to address the low-cost, high-access problem: products known as “narrow network” plans.

The term sounds pejorative. But in practice, is “narrow” necessarily bad?

Here’s how BCBST’s plans work: People can buy Network P plans, which offer access to 99 percent of the physicians in the state, said Henry Smith, BCBST’s chief marketing officer. In the late ’90s, BCBST introduced Network S, a slightly trimmer, cheaper product.

“Network P contains Vanderbilt, Saint Thomas, HCA and just about every other stand-alone facility in that market,” Smith said. “When you go from P to S, HCA drops out. For that tradeoff, the differential in a rate from P to S is about 14 percent.”

BCBST also developed a product called Network E specifically for the federal exchange. Smith says the goal of Network E plans was to create a product that previously uninsured people could afford. Network E rates are 10 percent cheaper than Network S rates.

BCBST can offer Network E for a low price because the plan funnels people to one large provider. In Nashville, people who sign up for Network E can get care at facilities owned by Saint Thomas.

Nashville is a business town, so people here should understand that negotiation: If BlueCross can promise it will direct every person on a given plan to Saint Thomas, Saint Thomas can offer BlueCross a cheaper rate.

“The negative side is that there is a tremendous gap in education around health care right now in our country,” Madison said. People tend not to read the fine print when they shop for insurance, and may not realize when they buy plans that doesn’t include a certain provider. There’s going to be temporary pain.”

“People are going to have to be burned on choosing a plan that doesn’t include their physician,” Madison said. “It’s almost a necessary evil. No matter how much is spent in marketing or PR or education, people have to experience it.”

And it is new. For a long time, individuals were protected from the price of plans.

While there has been a consumer learning curve, it has not been much of an issue for BCBST, according to Smith, who says that almost 30 percent of plans sold on the marketplace are Network E. “I don’t think we’ve got people out there by the thousands confused about what they’ve done — that doesn’t seem to be the case.”

Narrow networks could, however, churn up age-old issues in health insurance purchasing. What happens if patients are taken for emergency care to an out-of-network hospital? The truth is that a patient who suffers, say, a car wreck and is taken to the nearest hospital should never pay out-of-network rates for lifesaving care.

That doesn’t mean, however, that claims will always be filed correctly. “The systems don’t communicate the way they’re supposed to,” Madison said. People could receive bills that they have to double-check. Also, providers, patients and insurance companies all may differ on what defines life-threatening care.

“Ultimately, you are your best ally in that situation,” Madison said. “People are often quick to pay without asking, ‘Is this what I really owe?’ That’s where they’ve got to push back and dig in.”

Low-cost plans shed new light on these and other pricing and billing discussions among insurance companies, patients and providers. That back-and-forth will continue. In the meantime, narrow networks exist as a real, low-cost option for cost-conscious consumers.

These relatively new, limited networks are one more manifestation of a larger paradigm shift. As we transition to become true consumers of our own health care, it’s imperative that we understand exactly what we’re buying.